1/26/2016

LG bets on two 2016 flagship phones after ‘challenging’ 2015 and 60M sales

Following a phenomenal half a decade or so for many smartphone manufacturers, market saturation caused by lack of innovation and too few upgrade incentives made it much trickier for even Apple and Samsung to turn a profit and post sales growth in 2015.

Of course, there was also your occasional overperformer based in China that knew how to cater to increasingly cash-strapped audiences, while companies like Xiaomi or LG reported bright spots and not-so-bright ones in their end-of-year financial records.

Once again aided by improved box-office numbers in North America, the G4 and V10 creators gained a healthy 12 percent in worldwide mobile device sales between October and December year-on-year. That means LG shipped more than 15 million smartphones in Q4, bringing the 2015 total to 59.7M units, up slightly from 59.1 the year before.

Unfortunately, profitability continues to be the handheld family’s biggest weakness, with around $36 million lost in the 90-day timeframe alone. To reverse the unfavorable trend, LG candidly admitted it’s looking to introduce “two new flagship models” in 2016, as well as a “more cost-competitive value chain”, whatever that’s supposed to entail.

Clearly, we’re talking the LG G5 and V11, or however V10’s sequel will be called, as the G Flex roster always seemed underpriced and incapable of cracking the mainstream décor.

Overall, LG Electronics marked a nice 27 percent hike in fourth-quarter operating profit from 2014’s final three months, though net income was actually down, due primarily to the weak performance of both smartphones and TVs.